Commissioner of Income Tax vs Abad Hotels India (P) Ltd.

S. Sankarasubban, J.

References in the above case are as follows :

"1. Whether, on the facts and in the circumstances of the case, is not the assessee exigible to Expenditure Tax Act ?

Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the Expenditure Tax Act would apply only to the category of hotels identified by a bench mark of a minimum rent of above Rs. 400 for any type of accommodation ?"

Assessee is a private limited company running a hotel by name "Abad Plaza". For the assessment years 1989-90 and 1990-91, the assessing officer held that the assessee was liable to tax under the Expenditure Tax Act in view of the rent charges for the hotel rooms exceeding the limit prescribed u/s 3 of the Expenditure Tax Act. The assessing officer noticed that in respect of Suite No. 501 rent charged by the hotel was Rs. 700 per day. Expenditure tax was accordingly levied on the entire hotel receipts collected by the assessee during the previous years relevant for the assessment years 1989-90 and 1990-91.

The assessee filed appeals and the Commissioner (Appeals) held that expenditure tax was not leviable as there was only one unit of residential accommodation with rent charges above Rs. 400 per day. The Commissioner (Appeals) further held that even if there could be levy of expenditure tax, it should be limited to the chargeable expenditure incurred in respect of suite 501 only when it was let out on single occupancy basis.

The appellate authority found that the decision taken by the Tribunal in the case of International Hotel squarely applied to the facts of the case, The revenue took up the matter before the Tribunal. The Tribunal also dismissed the appeal. It is in the above background that these references have been made.

The expenditure tax is a tax imposed on chargeable expenditure incurred in a hotel wherein, the room charges for any unit or residential accommodation at the time of incurring of such expenditure are Rs. 400 or more per day per individual. The revenue submits that the words "any unit of residential accommodation" means if one room is given on rent for Rs. 400 or higher than the chargeable expenditure tax in that hotel is liable to be taxed under the Expenditure Tax Act. On the other hand, learned counsel for the assessee submitted that it was not legal to tax all the inmates of a hotel because one of the rooms is let out for Rs. 400. Learned counsel for the revenue would contend that the words "any unit of residential accommodation" means even a single room. Learned counsel for the assessee submits that the word "any" means all.

Learned counsel for the revenue brought to our notice the speech made by the Finance Minister at the time of introduction of Expenditure Tax Act. Learned counsel referred to 165 ITR 13, wherein paragraph 73 the Honble Minister speaks about the introduction of the Expenditure Tax Act. It is stated as follows : "Those who can afford to patronize high class hotels should also be afforded the further pleasure of contributing to the national exchequer. A separate legislation will be brought forward for levy of a tax on expenditure in expensive hotels. This tax, to be levied at 10% of expenditure, will not apply to payments made in foreign exchange. It will become effective after passage of the necessary legislation."

Learned counsel for the revenue then brought to our notice the decision in Kerala State Industrial Development Corpn. Ltd. Vs. Commissioner of Income Tax, , wherein the Supreme Court held thus : "The Finance Ministers speech before Parliament can be relied upon to throw light on the object and purpose of the particular provisions introduced by the Finance Bill". He also brought to our notice the decision in Federation of Hotel and Restaurant Association of India, etc., Vs. Union of India (UOI) and Others, wherein the validity of the Expenditure Tax Act has been considered and held to be valid. According to us the interpretation to be given to the word "any" has to be given after looking into the purpose of the Act. It has been held that the word "any" can mean one or many depending upon the circumstances in which it is put.

In "The Law Lexicon", the meaning of the word "any" is stated as follows : "It is no doubt true that the word any may in certain context imply all. For example, when the law provides to the effect that any of a particular class of persons, such as the shareholders of a company or directors thereof, may be prosecuted for a particular offence which may be committed in connection with the conduct of the business of the company, the use of the word any in such a context would imply that all persons, that is, all the shareholders or directors, as the case may be, prosecuted for the offence in question. In Shri Balaganesan Metals Vs. M.N. Shanmugham Chetty and Others, , the Supreme Court held as follows : "The word any has the following meaning : some : one of many; an indefinite number. One indiscriminately of whatever kind or quantity. Word any had a diversity of meaning and may be employed to indicate all or every as well as some or one and its meaning in a given statute depends upon the context and the subject-matter of the statute. It is often synonymous with either, every or all. Its generality may be restricted by the context".

Judged in the above view, according to us, the word "any" occurring in section 3 of the Expenditure Tax Act cannot be restricted to one unit of residential accommodation. If we restrict to one, it will mean that all the persons who are accommodated in a hotel of which one room is rented out for Rs. 400 per day, then all the inmates are liable to pay expenditure tax. According to us, it is not the intention of the statute. The words "any unit of residential accommodation" means all the units of accommodation. According to us, this interpretation will be in tune with the intention of the legislation.

In the above view of the matter, we agree with the Tribunal and we answer question Nos. 1 and 2 in favour of the assessee and against the revenue. ITR is disposed of.